Question 3: Concentration (Marketing)

[Date of Submission]

Question 3: Concentration (Marketing)

Major Current Trends that Shape External Environment

Consumer behavioral studies have grown and evolved, including an increasing number of epistemologies and theoretical perspectives as well as an increase in abstract and scope. Thus from a literary perspective, consumer studies and customer relationship management (CRM) is co-evolving as a business paradigm. One of the earlier studies in psychology dealt with individual motivation. Maslow (1943) discussed the ascending hierarchy of needs from the physiological needs, the safety needs, love and belonging, self-esteem, and self-actualization. These needs are related and build upon each other with the most essential goal dominating one's consciousness (Kumar & Reinartz, 2012). However, these needs are not tiered but may overlap in varying degrees with each individual. For example, Maslow (1943) expressed that, for some individuals, self-esteem is more important that love.

Maslow (1943) opined that there are degrees of satisfaction rather than “all-or-none” motivating demands, but this also varies from individual to individual. Consumer loyalty has emotional and rational components. Individual feelings, expectations, staff relations, and other evincive subjective qualities determine emotional loyalty, whereas objective thinking, information analysis, and understanding of the organizational processes determine rational loyalty.

Martinelli & Balboni (2012) discussed how strong consumer brand ties are further strengthened by group identification around a brand whose users are connected with one another. This group identification is essential to the attitudinal loyalty experience as they meet the emotional needs of the individual (Ou et.al, 2013). Affective commitment occurs when the commitment becomes internalized and is attached to emotional factors. This is the deepest commitment as it affects the degree of attachment and identification. Therefore, convenience stores need to maintain strong customer relationships in order to develop customer loyalty and commitment (Smith & Potter, 2010). This commitment affects the consumer/business relationship generating greater emotional bonding between the company and its consumers. Attitudinal loyalty advances a psychology in which consumers differentiate one brand from another fostering competitive advantage.

This phenomenon is primal extending beyond “branding” and affects the aforementioned loyalty constructs (Aurier & Lanauze, 2011). Thus attitudinal attachment leads to attitudinal behaviors as “linked to future usage, enhanced word of mouth recommendations, and ultimately to customer-oriented profitability”, which is essential for long-term sustainability and profitability. Marketing academics and practitioners? focus on understanding and cultivating customer loyalty is not surprising considering the evidence supporting the connection between customer loyalty and long-term company profitability (Kumar & Reinartz, 2012).

Customer loyalty is linked to firm profitability both directly and indirectly: loyal customers have higher repurchase rates, hold longer relationships with their preferred brands, and are more likely to recommend their preferred brands to others. Loyalty is such a direct driver of profitability that loyalty-derived metrics can be used to estimate company value, and in some cases yield more accurate estimates of long-term stock price performance than traditional valuation methods. Although the relationship between customer loyalty and firm profitability has been credibly established, an operational understanding of loyalty is still emerging. Another mechanism to help improve the experience ...